Market Analysis: European Shares Rise on Improving PMI Readings

FXOpen

Yesterday, the values of the PMI index (it is characterized as a leading indicator of industrial production and services) for European countries were published:
→ in Germany: fact = 42.3; expected = 41.1; a month earlier = 40.7;
→ in France: fact = 42.6; expected = 43.2; a month earlier = 42.6;

Although the index values are below 50, indicating a contraction in the economy, the dynamics are encouraging. Thus, in France, the index stabilized after a series of declines. And in Germany, the index is consistently growing after a minimum of 38.8 in July. In this way, business is reacting to the fact that the ECB may have reached the peak of increases and monetary policy will not tighten in the future.

At the same time, the ESX50 index of 50 European shares gained bullish momentum and reached its highest levels since mid-August. Equity market participants may be feeling strongly positive about the rally of more than +9% in less than a month.

However, the daily chart of the ESX50 shows that price dynamics allow a structure of trend lines (shown in blue) to be drawn, reminiscent of a Gann fan. And what's interesting is that the current value has reached an important line (shown as thickening) in this structure, which can serve as resistance - as it did more than once during the period from April to July.

Given that the RSI indicator is forming divergence in the overbought zone, it can be assumed that the market is vulnerable to a pullback.

Trade global index CFDs with zero commission and tight spreads. Open your FXOpen account now or learn more about trading index CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Indices

Nasdaq-100 Price Hits All-time High after 4 Straight Months of Gains European Stock Markets on All-Time Roll Despite Economic Bleakness Nvidia's Successes Helps S&P 500 Price Reach Its All-time High S&P 500 Inches Down After Long Rally as FOMC Minutes Approach NASDAQ Price Declining Ahead of NVDA Report

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: CAC 40, AUD, OIL, AMAZON

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of  FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. European Stock Markets on

Commodities

Price of Gold Briefly Exceeded $2,050 per Ounce

In addition to new records in the stock markets, the reaction to yesterday's news about inflation in the US was also a decrease in government bond yields and a rapid rise in the price of gold — the cost of XAU/

Indices

Nasdaq-100 Price Hits All-time High after 4 Straight Months of Gains

The Nasdaq-100 index is holding above 18,000 today following yesterday's bullish momentum, fueled by inflation news. The PCE consumer spending index amounted to 0.4% on a monthly basis, which was in line with analysts' expectations. A year ago,

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.